A great deal of change has taken place in the business community over the past three years due to the economic downturn. Many organizations have experienced significant turbulence over this period, some good some not so good, but change nonetheless. This change has likely had an impact on your product lines, products, inventory levels, market, staff, suppliers and/or customers. The economic uncertainty resulted in many businesses freezing or canceling their expansion strategies and instead instituting a program of cutting costs by reducing inventory, staff and services.
Take Advantage of the Rebound
Your organization has most likely experienced significant change, but has this change reflected in the size, layout, or organization of your manufacturing and/or distribution facility? The answer is often that little or no change has taken place in your physical environment. The question is, given significant change, how efficiently are you using your physical environment? This is where applying advanced engineering tools can help you optimize the flow of product through existing facilities. Applying this technology allows you to quickly take advantage of the rebound in demand you may have experienced, and quickly gain more results, efficiency, and productivity in your organization.
Quickly Trigger Positive Change
Let's walk through how this might work. Warehouse optimization tools allow you to answer questions regarding what products should be produced and stocked in what locations and how much space should be allocated to them. Many tools of this nature are used only on occasion, when a major physical plant or a new warehouse is being designed. Instead, you want to look for solutions that can be used as triggers to alert you about changes which occur in the business, and allow you to quickly integrate those changes into your physical environment, insuring high levels of efficiency, productivity, and space utilization. In other words, optimizing the warehouse flow should be a dynamic exercise, a regular part of business activities, not a once in a lifetime event.
Below is a short review regarding how you can organize your facility, identify and optimize product storage and movement, and create actionable productivity reporting.
Managing your space on a proactive basis improves material flow and operational productivity. Create a baseline space utilization graphic of storage, overflow and staging locations by facility, aisle, area, size and group (see Figure 1). Most business and operational changes affect space and need to be managed to increase profitability.
Figure 1 - Baseline
Material handling and picking activity are also affected by customer demand and seasonal changes. Now we need to illustrate current and future throughput considerations, which help prevent congestion during peak periods, on a daily to an annual basis. In Figure 2, fast and slow moving items are identified with green and red SKU numbers in their respective storage bay location. Once these are modeled, then alternative optimal layouts can be considered. If that is not an option, a more efficient flow can be designed. The green SKUs in the Slow (red) Zone should be relocated to the Fast (blue) Zone where possible. The red SKUs in the Fast (blue) Zone should be relocated to the Slow Zone or into multi-deep storage for better space utilization. After the SKUs (storage loads) have been relocated to their proper Zones, a third analysis can be run to determine the amount of congestion per aisle and if there needs to be additional SKU relocation across the aisles in the Fast Zone.
Figure 2 - New flow, based on modeling demand
One case study from our work shows productive gains from applying these techniques.
By using an engineering tool, in this case, Space Flow, we could see the Big Picture for the client, and then zoom in on the details and eliminate the bottlenecks (see Figure 3 and Figure 4 below). This illustrates that your fast movers should be consolidated into similar picking zones to insure throughput efficiency.
Figure 3 - Space Utilization %
Figure 4 - Material Flow - Picks per Week
Conclusions:
Often, small investments can provide great gains. These planning activities and the technologies that support them need to be incorporated into regular business planning so that you can respond as dramatic business events occur.
The question is, are you ready for the rebound?
Dr. Edward F. Knab
Productivity Constructs, Inc.
"Helping companies optimize people, processes and performance to achieve their full potential."
www.edwardknab.com
Office: +1 800 660 8718
Mobile: +1 949 413 7333
Skype: edknab or 760 904 0312
www.supplychainexperts.ning.com
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